If you are this bad at math, then you should just shut up now and stop
constantly posting attack responses to everything I write.

I will spell it out for you now, in extremely simple language that
even a complete and utter moron can understand. If you still fail to
understand, then you would be going into my killfile if f.cking Google
Groups had such a feature, and will definitely no longer get detailed
responses from me, since any such response will obviously just sail
right over your head.

Q: Little Johnny spends $10 to develop a piece of software and then it
costs $0.05 for him to make each copy. He sells copies at $0.10 each.
How many copies must he sell to break even? To have $10 more than he
began with?

A: Each time he makes and sells one copy, it costs him a nickel to
make and he receives a dime, so he gains $0.05. Two copies sold nets
him $0.10 in revenue. Two hundred nets him $10 and he breaks even when
he sells the 200th copy. Every copy he sells after that is a nickel of
profit. After the 400th copy he has $10 more than he began with. After
the 1000th copy he has forty whole dollars to show for his enterprise.

See above. Little Johnny recoups the costs after selling 200 copies.

Yes, but a properly functioning market should also hold them down to
just above marginal cost. Thin margins are a sign of healthy
competition. Fat margins (especially as obese as each sale being 99.9%
net revenue!) indicate a serious problem has developed in that
department. Healthy competition is more "just", because things are as
affordable as they can be given the actual costs of manufacture,
making it possible for the poor to get something that costs $10 to
make if they have around $11, instead of it being priced out of their
reach at $300 or something. Healthy competition is also more
efficient, and the economy grows much faster than if monopolists can
just stagnate and rake in money without doing very much except the odd
lobbying or suing here and there.

You are posting total BS, which needs to be publicly debunked in case
someone otherwise actually reads and believes the nonsense you wrote.
See the above math problem with Little Johnny, which proves that you
are wrong. Now will you please give up trying to "prove" your
cockamamie theory right when it's been roundly mathematically
disproven? It can't get any more disproven than that!

It is a straw man argument. One-time costs do not affect long-term
profitability. Recurring costs are the ones to watch out for.

No, it wouldn't. Little Johnny is in the hole $10 for a while but
eventually is showing a profit, in case you already forgot. All
businesses have to invest some money in R&D before they can make it
back and then keep making additional money with a product. This is
normal. It is in no way unique to the software industry. GM may spend
millions designing a new car model, which is based on existing
technology so no patent protection for that investment. If they make
hundreds on each car sold, as seems likely, then after the first ten
thousand units or so shipped they've broken even and every subsequent
car of that model sold adds to their coffers. Where do they get the
millions? From the profits from earlier operations. A startup would
get it from venture capital or investors of some other sort.

Movie studios spend enormous amounts to make a movie. Sometimes they
make back their production costs in the theatre and sometimes they
don't. Enough do that they turn a profit on average, even if sometimes
they're temporarily in the hole by tens of millions due to an
expensive flop like Waterworld. Note that this is before the heavily
DRM-encumbered DVDs launch; usually a box-office failure doesn't make
much more in video sales anyway. I think the studio that made
Waterworld still hasn't turned a profit on it after a couple decades
of VHS and DVD sales, and all the DRM and copyright in the world
didn't do any good there. It simply wasn't popular. If it had been,
all the free copying in the world wouldn't have STOPPED them turning a
profit. It might have slowed it down. It might actually have
accelerated it by free copies generating additional buzz and through
sales of merchandise of various kinds -- popularity would have meant
being able to sell mugs, T-shirts, and action figures by the ton-lot.

Flops will still be flops. Hits will still be hits. Only the way the
money is made off the hits might change. There isn't much to be made
off the flops, and there never will be, unless you outlawed freedom of
speech and outlawed bad reviews and imposed amazing levels of police-
state nastiness to quell word-of-mouth "reviews" from spreading. We
certainly don't want to do THAT just to protect a few special
industries' profits, ones that are profitable anyway. Why in fact do
any curtailing of freedoms for such a purpose then?

No. The development costs are like the farmer's land. They are paid
once and then copy after copy can be made and sold for cheap. The
farmer isn't so lucky. After buying the land and paying that cost
once, ear after ear of corn can be grown but it's rather more labor
intensive per ear of corn, and there's probably land taxes too to
amortize over each year's crop.

You seem to be laboring under the delusion that the development cost
for a piece of software has to be paid again for every single copy,
which is utter hogwash. Once a single copy has been made at whatever
cost, further copies are pennies each -- the cost of stamping one more
CD at a factory somewhere. It goes up to a buck or so if the volume is
low enough, but even then no higher -- I can burn CDs one at a time
for about a buck each myself, so the "small press" limit of the
marginal cost of reproduction of software is around $1 per 650MB. For
very big chunks of software that's potentially as much as $5. With
high volume and a disc-pressing factory it's still peanuts -- nickle-
and-dime territory. Adding shipping and handling costs can raise it to
a buck a disc or so in volume, and maybe $20 a disc "small press".
Downloading instead of making physical discs brings it back down to
pennies. It's certainly never anywhere near $300.

Remember that, assuming they don't provide free support, these are the
ONLY costs that grow proportionally to the number of copies they make
and sell. And those costs are not raised at all by any third-party
copying and distribution.

If the purpose of selling copies is to pay down the larger cost of
making that very first copy out of whole cloth, selling them for more
than around $40 (discs in small lots) to $0.25 or so (downloads)
suffices to ensure your initial costs get paid down.

The only real complication is that if the initial costs were paid out
of borrowed money there's interest, and prices need to increase to pay
down the debt faster than interest accrues so that it eventually
disappears instead of growing. In this case, the added amount needs to
be higher for lower sales volume, and lower for higher sales volume.
For very high sales volumes (e.g. Windows XP when it launched) you can
still charge say a buck a download and pay off any reasonable
combination of debt and interest-rate in a few years -- especially
since lowering the price further increases sales volume!

And there's also the option of saving up money to make the initial
investment instead of using a loan to finance initial development.
Then there's no interest to worry about when paying off the initial
costs. Although you probably still want that "principal" to be paid
off at a rate exceeding inflation of course.

You're inventing this claim out of whole cloth.

What goes into making a piece of software like say Windows XP?
You make a first copy. This costs lots.
You make more copies, which each cost very little.

The one large cost happens once, up-front. It does not recur, unless
you decide to make something like Windows Vista, which is obviously a
gamble (and MS looks like it might lose this one).

Overhead, labor, and the like associated with the development effort
is part of that cost-of-the-first-copy. Overhead, labor, and the like
associated with each disc pressed subsequently is part of the marginal
cost of reproduction, and we are assuming the price per copy is a bit
higher than that cost.

Marketing is optional. Spending a bunch of money to spam everybody in
sight is a waste of money these days, when there's Internet word of
mouth. Make something good and people will find out about it and beat
a path to your door. With something like a new version of Windows, a
single bit of public fanfare should start it selling at a decent rate,
and people won't need reminding, because they'll be saturated in
plenty of mentions of the product. I avoid and block Internet ads and
aren't watching much TV during summer rerun series, but I run into
mentions of Vista constantly. No, I don't need reminding that it's out
there and if I didn't think it was at best a waste of time and money
I'd be getting a copy or preparing to without any extra prodding from
Microsoft.

Marketing is only really needed to generate sales of a product that's
shoddy and nobody much wants, or something that's really obscure, and
in the former case I say tough sh.t, and in the latter case the
marketing should be more narrowly targeted.

And marketing is finely tuned. Any sensible company will figure out
that if they spend $X a year on marketing and use it in various ways,
they'll get $Y a year worth of extra sales versus if they spent
nothing, and look for where $Y is as much bigger than $X as possible.
In that case, every dollar spent on marketing gives rise to an extra
$1.10 or whatever in revenue, so marketing is actually a profit center
when you think about it, and is paying for its own costs.

Stupid companies of course spend $7 zillion on saturation-bombing the
planet with their spam and end up making $40,000 worth of extra sales
and then wonder why they are not doing well on the stock market. These
ones can go straight to hell for all I care; it's their own damn fault
for not doing the math.

They let anyone make and give away or even sell copies of their
flagship software product. They sell copies themselves at around $60 a
pop. They make money on that because the copies are so cheap. They
also sell paid support services, and finance further development out
of the profits from the support services (and also outsource it,
partly to volunteers at no cost). It works -- everyone seems to come
out a winner. Red Hat, its competitors, its customers, and its
freeloading non-customers. You cannot possibly contemplate arguing
against that kind of success!

(Also notable is that the support service presumably generates
information guiding further development, as well as the money to
finance the costs of developing new versions.)

[Remaining rudeness deleted]

Lew, feel free to shut up now. You clearly don't know what you're
talking about, and you clearly have all the mathematical intuition of
a potted petunia. Figuring out if the revenues exceed the costs long-
term and doing this accurately is clearly not something you're capable
of achieving, and you can't possibly make a cogent and correct
argument on this topic if that is the case. Certainly your attempts so
far have been dismal failures. So I kindly suggest you cut your losses
and stick to posting about Java itself.